While there are many gifts that demonstrate love, the ones that continue to make a difference when the giver is no longer around, in my opinion, are often the purest form of love. I am certain you may think of a variety of gifts fitting this description, but the one I have in mind is life insurance. While no amount of money can replace a lost loved one, your generosity can make a significant difference in the days and years ahead for your family.
Sunday evenings I usually spend an hour watching a favorite TV show, Extreme Makeover, Home Edition. I enjoy the show not only as entertainment, but also for the number of lives they are changing. However, every once in a while I ponder why the family needs help. Clearly a tragedy occurred, but in many cases it’s not one that is unique to the show, but similar to events here in Blount County or anywhere else. Events that occur every day. The tragedy I am referring to is a premature and unexpected death. Headlines frequently frame the story of the tragic death of a young parent who lost their life to an act of violence or an unforeseen accident. In either case, the impact is the same, a family is left to deal with the loss of a breadwinner, comforter, role model, and caregiver.
But, how can a person or family expect to deal with such a loss? The depth of the loss is multi-faceted, but the segment I tend to focus on due to my profession is the financial impact. Had the loved one who is now deceased purchased life insurance, the chances of their family finding themselves in financial difficulties would clearly be reduced. The mere purchase of life insurance is not a magic bullet, but purchasing an amount of death benefit calculated by a professional can and most likely will make a profound difference for the surviving family members. They will not have to hope for financial security by winning the lottery or getting a new home from the ABC network.
A properly calculated death benefit will not only take care of final expenses, but in many cases will permit surviving family members to pay off substantial debt, secure college educations for their children, provide decades of financial security instead of years of worry and downsizing, and even make retirement possible for their surviving spouse. So how much life insurance is the right amount? Regardless of the amount I mention, the likelihood it would be the correct amount for my readers would be unlikely. The amount of your current income, amount already saved for your family and retirement, the amount of debt, as well as well as other needs or desires, all play a role in calculating the correct amount.
A professional will be able to support the amount of life insurance being recommended. You should review this calculation for a couple of reasons. The first, so that you can be certain nothing has been overlooked. Secondly, so you will understand why the amount is as large as it is so you do not end up later with a policy written for anything less than what is needed. It is easy for some to believe the $400,000 or higher recommendation may be that of an over zealous salesperson, and there is no way their family needs such a large sum. Reviewing the details of the calculation is one way to be certain; another would be to visit with any person who has lost a spouse. For many, the benefit sounded so large at the time of purchase there was no way they would ever be lacking should something tragic happen. At least that is they thought until they were forced to create a new financial future and replace the lost income. Why create a financial nightmare and related stress at the same time your family is going through such a huge personal loss? Give the gift of love, and make sure your family has a future that is secure, even if you are not here to see it.
For help protecting your family, contact an area licensed professional knowledgeable about life insurance, or contact my office. During this season of giving, make sure you give a secure financial future to your family and loved ones.
HOW TO REACH THE WRITER
Would you like a response to a financial question? Send your question to Doug Horn, 115 W. Broadway, Maryville, TN 37801. Be sure to mark your envelope Money Matters.
Doug Horn, CFP, is an area financial planner with more than 24 years financial experience and founder of Quality Financial Concepts, located in downtown Maryville on Broadway.
Doug Horn, CFP, Registered Investment Advisor in Tennessee and Texas and Registered Principal, Branch Office of and Securities offered through CUE Financial, Member FINRA, SIPC.